Troilus Gold Corp. [TLG-TSX; CHXMF-OTCQB] said Thursday June 10 that it is raising $35 million from a bought deal offering of units and flow-through units. The company said proceeds will be used to fund engineering efforts, feasibility level studies and exploration at its Troilus gold property near Chibougamau, Quebec.
Troilus said an underwriting syndicate has agreed to purchase on a bought deal public offering basis, 4.54 million units of the company for $1.10 each, generating gross proceeds of $5 million, as well as 3.96 million flow-through units at $1.26 each, generating a further $5 million.
The underwriters will also purchase 13.5 million flow-through units at $1.48 per unit, for gross proceeds of $20 million, and 2.6 million flow-through units (QC flow-through units) at $1.89 each for gross proceeds of $5 million. Aggregate proceeds are expected to be approximately $35 million.
The underwriters have the option to purchase up to an additional 15% of the units and traditional flow-through at the offering price. That option will expire 30 days after the closing date and is expected to generate $1.5 million in additional proceeds.
The units will consist of shares and warrants entitling the holder to acquire one common share at an exercise price of $1.50 for a period of 24 months following closure of the offering.
On Thursday, the shares eased 9.3% or 11 cents to $1.07 on volume of 1.19 million. The shares are currently trading in a 52-week range of $1.82 and 84 cents.
Troilus is aiming for a mineral expansion and potential restart of the former gold and copper Troilus mine. The Troilus property is located northeast of the Val d’Or district, within the Frotet-Evans Greenstone Belt in Quebec. From 1997 to 2010, Inmet Mining operated the Troilus project as an open-pit mine, producing more than 2.0 million ounces of gold and nearly 70,000 tonnes of copper.
After mining was completed in April 2009, the mill ceased to operate and the camp was subsequently sold and dismantled. Inmet was acquired by First Quantum Minerals Ltd. [FM-TSX] in 2013.
A preliminary economic assessment (PEA) has indicated that the project could produce 246,000 ounces of gold annually for the first 14 years of operations, and 98,000 from year 15 onwards. Projected payable metal includes 3.8 million ounces of gold, 265 million pounds of copper and 1.5 million ounces of silver over a 22-year mine life.
The PEA envisages an initial capital expenditure of US$333 million. Sustaining CAPEX over the life of the mine is estimated to be an additional US$506 million. The all-in-sustaining cost is estimated at US$1,051/ounce.
The objective of drilling last year was to upgrade current mineral resource estimates and continue the expansion and exploration of mineralization across the property following the discovery of the Southwest Zone (SWZ) earlier this year.
A total of 80,500 metres of drilling since 2018 delivered an estimated indicated mineral resource of 4.96 million ounces of gold equivalent (177 million tonnes with an average grade of 0.87 g/t AuEq). On top of that is an inferred resource of 3.15 million ounces of AuEq (116.7 million tonnes with an average grade of 0.84 g/t AuEq).
Those resources are located in areas below and around the former pits.